Save money shopping by avoiding tariff price increases

How to Spend Less by Avoiding Tariff Price Hikes

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The announcement that the U.S. have imposed additional tariffs on a wide range of Chinese products might have you worried about the effect this will have on your spending.

Whether you are shopping for the home or office supplies for a business, price increases from tariffs may have a tangible effect on your budget. According to a study by Trade Partnerships Worldwide,

The average U.S. household of four could end up spending up to $767 extra per year as a result of price increases linked to the tariffs.

Fortunately, there are a few strategies you can use to ensure you are getting the best possible price on the purchases you make.

Know Which Products are Affected

The U.S trade Representative has published a complete list of the items that are subject to tariff increases – all 6000 of them. While it’s exhaustive, it’s not an easy read so here’s a list appliances (by way of example) that are likely to be affected to some extent:

  • Refrigerators
  • Freezers
  • Air conditioners
  • Vacuum cleaners
  • Ranges
  • Dryers
  • TVs
  • Washing machines
  • Microwaves
  • Water heaters

Some of these products are affected by tariffs directly, like fridges and freezers. Others, like microwaves, are indirectly affected because tariffs have been imposed on parts and assemblies that go into producing them (driving up production costs).

Understand the Difference Between Tariffs and Prices

It’s important to understand that just because tariffs have been imposed doesn’t mean prices shoot up across the board. In fact, the effects of tariffs can take months to manifest and can have varying levels of severity.

Price Hikes Vary According to Product Type

You might assume that a 25% tariff increase leads to a 25% increase in price. However, that’s not always true. Distributors and retailers might try absorb some of the costs themselves in order to remain competitive. This is often the case for larger ticket items that have bigger profit margins.

For products with very low profit margins (usually cheaper, smaller items) it’s likely there will be proportional increases in price because there simply isn’t room in the supply chain to absorb the costs of tariffs.

Price Hikes Vary from Brand to Brand

Depending on brands’ exposure to tariffs (based on what they sell and how much they rely on countries that have tariffs imposed on them) they may increase prices by varying amounts. Some might even look for supplies elsewhere in order to try and avoid passing on price increases to their customers.

This makes it hard to know exactly when and by how much prices will increase.

Tariff Increases Take Time to Get into the System

Retail is a highly competitive industry with a lot of smart people constantly working to give themselves a competitive edge. This means that they tend to plan ahead and buy stock when they know they are getting a decent price.

The net result is that certain sellers might not have to increase their prices for some time to come because they have purchased stock before the tariffs were imposed. It’s only when they have to order again that their costs increase and prices might may rise.

Shopping Strategies

It’s in your own financial best interests to recognize that tariffs may lead to price increases and use that knowledge to avoid the worst effects of tariff related price increases in order to save money.

Here are a few quick and simple ways to ensure you spend less the next time you shop.

Buy American

Tariffs have no effect on American companies that produce products entirely in the U.S. While these products might usually be more expensive than Chinese made goods the 25% overhead levied on cheaper Chinese imports make American prices significantly more competitive.

Supporting local companies has the added benefit of keeping dollars in your own economy leading to job creation and a whole host of other benefits. Here’s a list of over 100 brands that are 100% produced in the U.S.A and this includes furniture, cookware, electronics and tools.

Buy Sooner Rather Than Later

Since it’s nearly impossible to tell exactly when product prices might increase it is a good idea to purchase items (you know you are going to buy anyway) sooner rather than later.

At the moment, most sellers will still be selling stock purchased before the tariff increases went into effect meaning that there is no pressure to increase prices on those items. Once that stock runs out, however, the new imports will be subject to tariff increases and prices will rise.

Buy Older Models

Of course, if you’re not fussy about buying the latest 2019 model and are happy settling for a 2018 (it really wasn’t that long ago) then you should also be safe from increased prices (unless those 2018 models were only ordered recently).

The only way to know whether a 2018 or 2017 model is selling for the same price now as it was a while back is to research and compare prices.

Research Price Trends

Fortunately, there are a few great ways to find extremely useful, money saving shopping insights online. In particular, before buying a product you will need to know if:

  1. The current price is genuinely good compared to the historical price
  2. There are better offers on similar (possibly better) products

Imagine you find a deal on a fridge that looks great – say, 20% off.

Do you buy it?

What if there is another fridge that is usually 20% more expensive because it offers better quality and features but is right now priced exactly the same?

The following resources can really help you get a better sense of what constitutes a great deal before you buy (regardless of whether you are shopping in-store or online):

  • GoPennyGo: A price research tool that analyzes and compares deals and coupons on sets of top-selling Amazon products (for example, you can compare deals on specific appliances like Vacuum Cleaners). This helps you save money while buying better products.
  • CamelCamelCamel: An Amazon price tracker that shows price history data. This allows you to see if a product is priced better or worse now than it was in the past.
  • Offers: Surfaces deals and coupons from a wide range of brands and retailers, including Walmart, eBay & Best Buy. This helps you cast a wide net when searching for new deals.

Remember, it’s not all doom and gloom when it comes to rising prices.

Big retailers like Amazon will almost always have fantastic deals and offers available virtually across the board for the savvy shopper. Be sure to use the above-mentioned resources to ensure that you are always empowered with the knowledge you need to make a smart shopping choice to save your business or home unnecessary costs.

What other tips and advice do you have for avoiding the worst of price increases related to tariffs in the coming days, weeks and months? Share your ideas or tips in the comments.

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